Compound Interest Calculator

Compound interest means you earn interest not just on your original principal but also on the interest already accumulated. Over time this creates exponential growth — the longer money is invested, the faster it grows relative to simple interest (which is only calculated on the original principal).

A = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) − 1] / (r/n), where P is the principal, r is the annual rate, n is the number of compounding periods per year, t is years, and PMT is regular contribution. The calculator handles all of these inputs.

More frequent compounding produces slightly higher returns. Daily compounding beats monthly, which beats quarterly, which beats annually — but the differences are usually small. For most savings accounts and ISAs, monthly compounding is standard.

Use the Rule of 72 as a quick estimate: divide 72 by your annual interest rate. At 6% annual return, money doubles in roughly 72 ÷ 6 = 12 years. At 8%, about 9 years. The calculator shows the exact figure in the year-by-year table.

Simple interest only applies to the original principal (e.g. 5% of £1,000 = £50 per year, every year). Compound interest also applies to previously earned interest, so the £50 interest from year 1 also earns interest in year 2, growing your balance faster over time.